MODELS OF CONSUMER BEHAVIOUR-1

LEVELS OF CONSUMER DECISIONS
As a buyer or consumer you are all the time making decisions such as what product to buy (a book or a shirt as a birthday present for your friend), which brand (Lux, Liril, Hamam, Rexona or OK toilet soap) from where (Super Bazar, nearby corner shop, chemist), etc.

PROCESS OF DECISION-MAKING
The most basic and important requirement for the marketer is to understand how consumers make choices. Ajzen and Fishbein have attempted to explain human choice behaviour in their theory of reasoned action which states that:

“Generally speaking-human beings are usually quite rational and make systematic use of information available to them. People consider the implications of their actions before they decide to engage or not to engage in a given behaviour.”

Thus, making a decision is a rational and conscious process in which the consumer evaluates each of the available alternatives to select the best amongst them. Each decision you make involves an elaborate mental thought process, a degree of active reasoning, though on the surface it may not always seem to be so.

Understanding Consumer Behavior-1

Consumers differ from one another in terms of their sex, age, education, income, family life-cycle stage, personality and life style, and other personal characteristics which influence their buying behavior. Man is social animal and is influenced by the people with whom he interacts. Each person interacts with and is a member of many groups. These groups provide a point of reference of comparison for the consumer and are known as reference groups such as family, friends, social organizations, professional associations; the strongest influence is exerted by the family.

Culture is the most pervasive influence on our lives and influences all aspects of our behavior; consumers operate within the cultural framework of their society and purchase only those products which fit in with their cultural norms. Within each culture there exist many sub-cultures comprising distinct nationality groups, religious groups, racial groups, geographic groups that have their own unique values and life-style. Social classes are group of people who have similar income, education, wealth, social status, value and beliefs. The marketer must understand that people with different cultural, sub-cultural and social class background have different product and brand preferences and need suitably modified products and marketing strategies.

Understanding Consumer Behavior

A consumer’s decision to purchase a product influenced by a number of variables which can be classified into four categories, namely psychological, personal, social, and cultural. Consumer Behavior effect demand of product with the area also. For example consumer in city area preferred to use vertical blinds, roller shades or faux wood blinds. Which villages or rural area consumer preferred to buy curtains.

Man is a many faceted, complex psychological being. His consumer behavior is influenced by his motives, perceptions, attitudes and learning. Each of these psychological factors provides a unique mental framework for each consumer within which he makes his purchase decisions. For the marketer it is essential to associate his product with the motives and positive perceptions of his consumers. Also he must ensure that the product concept fits in with the consumer’s existing attitudes and beliefs. Owner of lifequotecenter.com says that they are provider of instant life insurance rates and life insurance quotes online, it is easy for them to sell their Term life insurance products to educated and literate consumer rather than uneducated and illiterates. Perceptions, attitudes and learning are most important of consumer behavior.

Consumers differ from one another in terms of their sex, age, education, income, family life-cycle stage, personality and life style, and other personal characteristics which influence their buying behavior. The needs of elderly consumers are different from those of young consumers. Newly married couple has needs which are totally different from older retired married couples. To successfully market to consumers with differing personal characteristics, the marketer must accordingly modify his marketing strategies.

Social Class-1

Social class is a complex variable which is determined by a persons’ income, occupation, education, personal performance and possession of different types of products. Social classes can be categorized on the basis of number of different bases such as blue collar workers and white collar workers, educated and uneducated and so on. Consumer behaviour is the study of why, how, what, when, where, and how often do consumers buy and consume different products and services.

Knowledge of consumer behaviour is helpful to the marketer in understanding the needs of his different consumer segments and developing appropriate marketing strategies for each. It is also useful for the marketer in developing and understanding of how consumers responds to the various marketing stimuli, which he provides in terms of the product, price, promotion and place. If the marketer can correctly identify those stimuli that evoke a positive response in the consumer he can very easily design effective marketing strategies using these stimuli.

The study of consumer behaviour also provides an insight into how consumers arrive at the purchase decision and the variable which influences their decision. Once the influencing variables have been identified, the marketer can manipulate them so as to induce in his consumers a positive purchase decision.

Reference Group -1

Formal and informal groups:
A formal group has a highly defined structure, specific roles and authority positions and specific goals. Rotaty, Lions, Jaycees are some of the well-known social groups in our society. Labor unions, social clubs and societies are other types of formal groups to which individuals may belong.

In contrast, an informal group is loosely defined and may have no specified roles and goals. Meeting your neighbors over lunch once a month for friendly exchange of news is an instance of an informal group.

Membership and symbolic groups:
A membership groups is one to which a person belongs or qualifies for membership. All workers in a factory qualify for membership to the labor union. A symbolic group is one which an individual aspires to belong to, but is not likely to be received as a member. A head clerk in an office may act as if he belongs to the top management group by adopting their attitudes, values and modes of dress. Both membership and symbolic groups influence consumer behavior but membership groups have a more direct influence. Primary, informal and small groups exert the maximum influence on consumers and are great interest for marketers.

Any of these groups can serve as a reference group for a consumer if it serves as a point of reference or comparison in the formation of the values, attitudes and behavior. As a part of one women social reference group, all member women are eligible to have a free medical insurance or maternity coverage. Different kinds of groups, whether small or large, formal or informal or symbolic qualify as a reference group. The concept of reference group is a very wide one and includes both direct and indirect or group influences.

Indirect reference groups comprise those individuals or groups with whom an individual does not have any direct face-to-face contact. Such as film stars, TV stars, sportsmen, politicians.

Reference Groups

We are talking consumer behavior and factors affecting it. We talked personal factors like learning, beliefs and attitudes, family life cycle, education and occupation, income and personality in our previous post. We talked social factor Lift Style and today we are going to talk about reference groups.

Reference Groups
As a consumer, your decision to purchase and use certain products and services, is influenced not only by psychological factors, your personality and life-style, but also by the people around you with whom you interact and the various social groups to which you belong. The groups with whom you interact directly or indirectly influence your purchase decision and thus their study is of great importance to marketers. If your friend is going to buy a cheap life insurance policies from agent a, then we are going to buy from same agent.

A group is defined as two or more people who interact to achieve individual or common goals. The three categories of groups which are important for the marketer to understand are:

• Primary and secondary groups
  
• Formal and informal groups
  
• Membership and symbolic groups

Let’s talk on each group in details.
1) Primary and secondary groups:
A primary group is one with which an individual interacts on a regular basis and whose opinion is of importance to him. Family, neighbors, close friends, colleagues and co-workers are example of primary groups. Secondary groups are those with which an individual interacts only occasionally and does not consider their opinion very important.

2) Formal and informal groups:
Rotaty, Lions, Jaycees are some of the well-known social groups in our society. Labor unions, social clubs and societies are other types of formal groups to which individuals may belong. A formal group has a highly defined structure, specific roles and authority positions and specific goals.

Social Factors - Consumer Behavior

We are talking consumer behavior in our blog. In our previous talk we talked different factor effecting consumer behavior. We talked Personality, income, Education and occupation, family life cycle as factor having effect on consumer behavior. Today we are going to talk about Social factors.

Social factors also have effect on consumer behavior. Social factors include Life-Style, Reference Groups, Family, Roles, Status, Group norms, Conformity etc. Today we talk on Life Style as social factor effecting consumer behavior.


Life-Style
Life-styles are defined as patterns in which people live, as expressed by manner in which they spend money and time on various activities and interests. Life-style is a function of our motivations, learning, attitudes, beliefs and opinion, social class, demographic factors, personality etc. While reading this unit, you are playing role of a student. But at the same time you also have your career, family and social roles to play. The manner in which you blend these different roles reflects your life-style.

Life-style is measured by a technique known as psychographics. It involves measuring consumers’ responses to Activities, Interests and Opinions (AIO), along with collecting information on demographic factors. Different individual’s responses are collected and analyzed to find distinctive life-style groups. Based on the AIO technique, different life-styles have been identified and described. The different life-styles are then used for market segmentation, product positioning and for developing promotion campaigns, including new products.

online consumer Behavior -1

I was surfing on net for consumer behavior and I found very interesting article on online consumer behavior. I like to share with you all. Share of online selling is increasing in total sales of any product. Product like mobile phone, hardware, wood blinds, window treatment online, gift article, books etc.

This report will outline the most relevant behavioral characteristics of online consumers and examine the ways they find, compare and evaluate product information. Comparison of the newly collected survey data with the existing consumer behavior theory resulted in detection of a number of issues related to a specific consumer group. The purpose of this report is to translate these findings into a set of implementation activities on strategic and technological level. Execution of these recommendations will result in better conversion of visitors into customers and encourage customer loyalty and referrals.

The focus group of this study will be young adults aged between eighteen and thirty-four interested in buying a mobile phone or a related product. We will talk more in next post.

Ref: agents website design analogik, guaranteedblinds

Income - Consumer Behavior

The income which a person earns is an extremely important influence on his consumption behavior. He may aspire to buy certain goods and services but his income may become a constraint. Income in this context really refers to the income available for spending (i.e. income after tax, provident fund and other statutory deductions). The person’s attitude towards spending versus saving and his borrowing power are also important influencing factors. Small size packaging in sachets for products such as tea, shampoo, toothpaste are meant for the lower income customers who cannot afford a one time large outlay of money on such products.

Products which are considered luxuries are more income sensitive than products which fall in the category of necessities. If you are marketing a luxury product you must keep a close watch on income and saving trends to avoid decrease in sales resulting from recession. To avoid sales decline you may need to re-position the product, change the marketing mix or both.

ref: Insurance CRM Software, SFA Software, Insurance Agency Management Software

Education and Occupation - Consumer Behavior

We talked Family life cycle, it's different stages and it's relation with buying patter of consumer. Today we are going to talk about effect of education and occupation on consumer behaviour. We all know that educated person get easily ready to adopt crm software or sfa software.

Education widens a person’s horizons, refines his tastes and makes his outlook more cosmopolitan. An educated person, as compared to somebody less educated, is more likely to consume educational facilities, books, magazines and other knowledge oriented products and services. For instance, an educated insurance agent gets ready to use agency management software, insurance crm software, and insurance sfa software. While less educated person my not easily adopt such insurance software.

The occupation also shapes the consumption need. People following specialized occupations such as photography, music, dance, carpentry, etc need special tools and equipment. But, apart from this specific need the status and role of a person within an organization affects his consumption behavior. Chief executives would buy three-piece suits of the best fabric, hand made leather briefcase and use services of airline and five start hotels. A junior manager or blue collar worker in the same organization may also buy a three-piece suit but he compromise on quality.

Family Life Cycle and Buying Pattern - 1

Why CRM, we are talking here and we talked aspect related with consumer behaviour in our past posts. CRM Software is part of Agency Management System. We are talking Family Life cycle and buying pattern of consumer in last post. Today we continue with that.

Full Nest - Old married couples with dependant children, when a person is in this phase financial positions still better. Spend on education, more tasteful furniture, cars, non-necessary appliances etc.

Empty Nest 1- older married couples, no children living at home, household head still working when a person is in this stage spend on travel, recreation, self-improvement, home-improvement, health care.

Empty Nest 2 - older married, no children at home, head retired - when a person is in this stage drastic reduction in income. Buy medical appliances and medi-care products which aid good health.

Solitary Survivor - In Labor Force - when a person is in this stage likely to sell home, but income still good.

Solitary Survivor - Retired when a person is in this stage Reduce income, spend on medical product.

ref: Insurance CRM Software, SFA Software, Agency Management System

Family Life Cycle and Buying Pattern

Stage in family life cycle is directly related with buying pattern of consumer. Agency Management System or CRM Software can help businessman to understand buying pattern of consumer.

Single Stage----
When a Person is in single stage that is young, unmarried people living away from home their buying pattern could be few financial burdens. Spend on ret. Food. Very basic kitchen equipment and furniture, recreation and leisure time accessories such as Mobile or CD player.

Young Newly married
When a person is in this stage of life with no children, better off financially than they will be in near future, wife is usually working, highest purchase rate. Spend on furniture, durables such as refrigerators, gas stoves, and vacations etc.

Full Nest1—
Youngest Child under 6, when a person is in this stage, spend maximum on home purchase. Interested in new products and influenced by advertising. Buy Tv, baby foods, cough medications, toys such as tricycle.

Full Nest2—
Youngest Child over 6, a person some wives return to work. Better financial position, less influenced by advertising. Buy large size packages, various kinds of food, bicycles, education, house purchasing.

ref: agency management system, Insurance CRM

Personal Factors - Consumer Behavior

Agency Management System include CRM. we are talking here why crm and we talked consumer behavior in our last talk.
consumer’s purchase decisions are also affected by his personal characteristics such as age, sex, and stag in family life-cycle, education, occupation, income, life-style, his overall personality and overall self-concept. We shall now discuss some of the influences.

Demographic factors and life-cycle stage

The first factor influencing buyer’s decision is his age. The need for different products and services changes with age. Babies and children have special needs for products such as milk powder, baby foods and toys. Young adults need cloths, recreational and educational facilities, transportation and a host of other age and fashion related consumption needs.

There are certain physiological differences between men and women which result in their having different consumption needs. Women need specialized medical facilities for pregnancy and delivery. Their requirement of cloths and cosmetics is different from that of men. Each gender thus has its own need for specific products and services.

Consumption behavior is also influenced by the specific stage of the family life cycle. We talk about it in our next post.

ref: agency management system, Insurance CRM & SFA software

Beliefs and Attitudes - Consumer Behavior

Why CRM, we are talking here which is a part of agency management system, as part of our talked we talk consumer behavior. In last post we talked about Learning

A belief is a descriptive thought that a person has about something. A person may believe that a certain cooking oil 'x' has the lowest fat content and is best for health. This belief may be based on some real facts or it i my merely be a notion or opinion that the person has.

The belief that the customer has about a brand is important because it determines his behaviour towards buying and using it. The beliefs constitute the brand image, and if the customer has the wrong beliefs he is likely to generate a negative image about the brand. The marketer must ensure that consumers have all relevant and correct information about the brand to facilitate formation of a positive brand image.


Attitude is a person's enduring feeling, evaluation and tendency towards a particular idea or object. Starting from childhood, attitudes develop over the time with each fresh knowledge input, experience and influence. Attitudes get settled into specific patterns and are difficult to change. It is easier to market a product which fits in well with the existing patterns of attitudes rather than change the attitudes to fit a new product concept.


ref: Insurance CRM Software, , agency management system

Learning - Consumer Behavior

Consumer Behavior we are taking here as a part of Insurance CRM Software and agency management system. We talk Perception in our past posts. Today we are going to talk Learning as important aspect of consumer behavior.

Learning

A new born infant’s sucking at the feeding bottle is instinctive behavior, but a five-year old clamouring for chocolate or chewing gum is the result of learned behavior. Much of an adult’s human behavior is learned behavior.

This is a very significant fact for marketers, because it implies that consumers can be made to learn the desired behavior through interplay of motives, stimuli, cues, responses and reinforcements. A housewife has the need for cutting down the time she spends for cooking in the kitchen. When this need is strong enough to propel her to take action it becomes a motive. The motive is directed towards the stimulus object - a pressure cooker. The stimuli are the various advertisement about the product which she sees and hears. Cuse are minor stimuli that determine when, where and how the hosewife responds.

We talk more on Learning in our next post.


ref: Insurance CRM, Insurance SFA Software, agency management software

Perception - Selective Retention

we are talking here Perception as part of consumer behavior with why crm and agency management system. Today we are going to talk abot Selective Retention as important aspect of Pereception.

Selective Retention:

People forget much of the stimuli which they receive and only remtain that information which reinforces their values and decision. You are more likely to remember the positive features of brand pressure cooker since they help reassure you that the decision which you had made was correct.

ref: Insurance Software Insurance SFA, agency management system

Perception - Selective Distortion -

Perception we are talking here as part of consumer behavior with why crm and agency management system.

Today, we are going to talk about Selective Distortion.

Let us suppose you have decided to purchase a specific brand ‘A’ of pressure cooker. Since you have already made your decision you would seek only that information which reinforces the correctness of your decision.

If you hear some positive remarks made about brand ‘B’ you would tend to find some shortcoming or flaw in that brand so that you do not feel that you have made a wrong decision by buying brand ‘A’. When to fit information to suit your own ideas or personal meaning, the process is known as selective distortion. Thus, a marketer may find that his message is often not received in the intended manner but it is twisted in different ways by different consumers.


ref: crm software and sfa applications, agency management system

Perception - Selective Exposure - CRM

Perception we are talking here as part of consumer behavior which is a part of any agency management system. We talked Types of Consumers, Buyer Vs User, factor influencing consumer behavior, psychological factors , Maslow's Hierarchy of Human Needs, Maslow's Hierarchy of Human Needs -1.

We start our talk with CRM and lead organizer software and we talked CRM, Importance of Consumer Behavior , and Consumer Behavior-Introduction.

Today we are going to talk on Selective Exposure as part of Perception with reference to Consumer Behavior.

You must have noticed that when you are on the look-out for purchasing a specific product, be it camera, refrigerator, television or any other high value product or service, you suddenly, seem to notice more than the usual number of advertisement pertaining to that specific product. This is because of your selective exposure. People are more likely to notice stimuli which relate to their immediate needs. For the marketer, the implication is that he has to carefully and accurately identify his potential customers since other customers are not at all likely to notice the stimuli. Having identified the potential customers, the marketer has to ensure that the stimuli are interesting enough to attract and hold their attention.


ref: CRM & CRM Software, agency management system

Perception - Consumer Behaviour and CRM -3

CRM and lead organizer software we are talking here as a part of agency management system. In our initial post we talked CRM, Importance of Consumer Behavior , and Consumer Behavior-Introduction .
As part of Consumer Behavior, we talk Types of Consumers, Buyer Vs User, factor influencing consumer behavior, psychological factors , Maslow's Hierarchy of Human Needs, Maslow's Hierarchy of Human Needs -1 and Perception.

Everyday, every hour of our life we are being bombarded with a variety of stimuli. If we were to analyze and interpret each one of these stimuli, it may drive us crazy. But we all have in-built screening system which helps us to ‘select; and recognize’ only the relevant stimuli and ignore all the others. As a person involved in marketing, you would like to ensure that the stimuli which you are providing are not ignored by the consumers. But rather they are recognized, interpreted and retained in the consumer memory. In this context, there are three aspects of perception which are of immediate interest to the marketer. These are selective exposure, selective distortion and selective retention.
We talk on each of them in our next post.

ref: crm, lead organizer , agency management system & lead management software

Perception - Consumer Behaviour and CRM - 2

We are talking here consumer behavior as part of our talk on Why CRM. We talked CRM, Importance of Consumer Behavior , Consumer Behavior-Introduction as a part of leadorganizer and lead management with reference to Why CRM and agency management system. In our previous post, we talk about Types of Consumers, Buyer Vs User, factor influencing consumer behavior, psychological factors effecting consumer behavior, Maslow's Hierarchy of Human Needs and Maslow's Hierarchy of Human Needs - Consumer Behaviour -1.

Today we talk Perception as psychological factor.

Perception is the second major psychological factor that influences consumer behavior. Perception can be described as “how we see the world around us”. All the time we are receiving messages through our five organs viz., eyes, ears, nose, mouth and skin, The different sights, sounds, smells, tastes and sensations that we feel are knows as stimuli.

Each person recognize, selects, organizes and interprets these stimuli in his own individual manner based on his needs, values and expectations and this is knows as perception. Since each individual’s need, motives and expectations are unique therefore each individual’s perception is unique.

Perception helps to explain the phenomenon of why different individuals respond differently to the same stimulus under the same condition. As a marketing manager, you are providing stimulus to your consumers through the physical shape, colour, size, fragrance, feel, taste of your product, it’s package, advertisements and commercials.

Your interest is to understand why and what different types of perceptions are associated with each of the stimuli so that you can highlight that particular stimulus or combination of stimuli which evokes the most favorable perception in the maximum number of consumers.

ref: CRM Software with leadorganizer, agency management software